Rupee trades marginally higher by 1 paise at 84.07 against US dollar

Mumbai, Oct 23 (PTI) The rupee stayed almost flat, trading 1 paisa higher at 84.07 against the US dollar in early trade on Wednesday, dragged down by strengthening American currency and relentless outflow of foreign funds.

Forex traders said a downward trend in domestic equity markets and elevated level of crude oil prices prevented a recovery in the Indian currency.

At the interbank foreign exchange, the rupee opened 1 paisa higher at 84.07 against the greenback and traded on a flat note in early deals.

On Tuesday, the rupee settled 1 paisa lower at 84.08 against the US dollar.

The local currency has been struggling to recover since October 11, when it closed at its lowest level of 84.10 against the dollar.

According to analysts, the rupee has been under pressure due to the continuous selling of Indian equities by FIIs in pursuit of better gains from the Chinese market.

Also, they said, a surge in the US treasury yields raised concerns that the Federal Reserve may slowdown its rate cut move, steering investors towards safe-haven assets.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.06 per cent to 103.97.

Brent crude, the international benchmark, fell 0.22 per cent to USD 75.87 per barrel in futures trade.

On the domestic equity market front, Sensex declined 96.34 points, or 0.12 per cent, to 80,124.38 points. The Nifty also fell 32.95 points, or 0.13 per cent, to 24,439.15 points. Both the indices tumbled more than 1 per cent on Tuesday.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth Rs 3,978.61 crore, according to exchange data.